Valeant weighs to sell contact lens maker Paragon amid FTC investigations

Valeant Pharmaceutical is considering to sell its contact lens manufacturing division, Paragon Vision Sciences while the Federal Trade Commission (FTC) is investigating the Canadian drug maker for potentially cornering the gas permeable contact lens market.

Paragon Visions Sciences is a manufacturer of raw materials used in gas permeable contact lenses, a popular rigid lens for people with keratoconus, a thinning disorder of the cornea.

Valeant's Bausch & Lomb unit purchased Paragon Visions Sciences earlier this year, in an attempt to consolidate the market for gas permeable contact lenses, according to Reuters.

The financial terms of the agreement were undisclosed.

As the company is considering the sale of Paragon, Valeant Pharmaceuticals stock is down by 2.81 percent to $89.60 in pre-market trading on Tuesday, according to The Street.

Valeant's stock have dropped more than 60 percent after facing the drug price hikes accusation on September.

Valeant has been hiking prices for the raw materials used in lens manufacturing called contact lens buttons, after the purchase of Paragon. The company has been using the market power gained by the purchase to double price of some contact lens raw materials.

Some of the lens laboratories that use Valeant's buttons moved their business to Valeant's competitor.

In addition to its attempts to monopolize gas permeable lens market, Valeant had also tried to acquire some of the laboratories that produce finished lenses. These laboratories use Valeant's buttons as its manufacturing input.

By selling Paragon, Valeant will lose its attempts to consolidate the market gas permeable contact lenses. The company will also lose its complete monopoly on Ortho-K lens, a gas permeable lens to treat myopia.

Valeant's monopoly of the Ortho-K lens market is the main focus of the FTC investigation. In order to placate the FTC investigation, Valeant is also splitting the operations of Paragon Vision Sciences from its other specialty contact lens manufacturer, Boston Products.

Alongside with the FTC investigation, Valeant is also facing an inquiry from lawmakers regarding the hiking prices of its two drugs, Nitropress and Isuprel, according to Opptrends.

The company has increased the price of Nitropress, a blood pressure drug, by 212 percent to $805.61 and Isuprel, a heart rhythm drug, by 525 percent to $1,346 after acquiring the rights for both drugs earlier.

Last month, a U.S. judge ordered Valeant to face an insider trading suit over the hostile pursuit of Allergan. The company was also accused by a short-seller of inflating sales using pharmacies such as Philidor. The accusation prompted investors to sell their stakes in Valeant Pharmaceuticals.